What about the boomers?

©Beaver County Times/Allegheny Times 2006, 08 September 2006, page 6A

Sunday, on "Meet the Press," U.S. Sen. Rick Santorum stated that he would not change Social Security benefits for people born before 1950. What about those born in 1950 and after 1950?

Let's say you were born in 1950. In 1966, you turned 16 years old. That means in the year 2006, you have been paying into the Social Security System for 40 years. If you were born in 1980, you turned 16 in 1996. That means in 2006, you have been paying into the Social Security System for 10 years.

The average annual income in America today is around $40,000. Workers pay 6.4 percent of their salary into the Social Security System. At $40,000, that's $2,560 per year. Over the past 40 years, adjusted for inflation, let's say a person has paid $25,600 every 10 years.

In this case, over 40 years, the total would be $102,400.

Your employer has also been contributing 6.4 percent. That's another $2,560 every year, $25,600 every ten years and $102,400 over 40 years. For a 40-year time period, the total employer and employee contributions would be over $204,800.

Now Santorum wants to change the rules for people born after 1950.

That's not fair. You don't change the rules when a person is 10 to 40 years into a retirement system. Imagine what would happen if 401(k) administrators tried to pull that stunt.

People are being told that they should not expect Social Security benefits to be there for them. If I paid into the system for 10 to 40 years, I better get some type of a return on my investment. Imagine what would happen if 401(k) administrators looked at you and said, "Because the president of the company was not fiscally responsible, don't expect a return on your 401(k) plan investments."

Nikola (Nick) Drobac
Aliquippa, PA 15001-2036

http://www.timesonline.com/site/index.cfm?newsid=17168979&BRD=2305&PAG=461&dept_id=478569&rfi=8

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